KSK Power Ventur plc (KSK), the power project company listed on the London Stock Exchange, with interests in multiple power plants and businesses across India, has raised £62.5 million ($98.8 million) through issue of fresh shares to unnamed institutional investors.
The money is proposed to be used for augmenting capital expenditure on various areas including consolidation of its stake in the Indian subsidiary KSK Energy Ventures Limited besides pursuit of new identified mineral development opportunities and fuel supplies and to invest in the area of renewable energy in India, such as wind power and solar.
The equity issue represents 8% equity dilution of the expanded capital base. The shares have been placed at a price of 510 pence a share valuing the company at £775 million ($1.225 billion).
T L Sankar, chairman of the company, said in a statement: “Together with the recently announced tie-up of the entire capital outlay of $3.6 billion for our 3.6 GW Mahanadi power plant at Chhattisgarh, we are well placed to pursue the exciting growth opportunities across various areas.”
Consolidation of holding in Indian subsidiary KSK Energy Ventures Limited is part of the deal to buyback shares from Lehman Brothers. Early this year, KSK had entered into an agreement with Lehman Bros group that gave it the right of first refusal to buy back part of the stake in KSK Energy Ventures owned by the US firm that had filed for bankruptcy two years ago.
KSK owns around 52% in the Indian listed firm through a wholly-owned arm and had signed a deal that gave it the option to raise its holding by purchasing 3.67% from Lehman Bros entity LB Mauritius III Ltd for $52.7 million (Rs 247.5 crore).
Another unnamed third party had been granted the right to buy a separate chunk of shares owned by a different Lehman Bros affiliate cumulating to 2.83% stake for $40.5 million (Rs 190 crore), as per the agreement. Lehman Bros firms owned 18.9% (70.7 million shares) in KSK Energy Ventures. Of the total, 12.23% stake (13.7 million shares) is locked up until October 2011 through a share lock up agreement where KSK already has the first right of refusal. KSK and the other investor now has the right to buy out the balance 6.5% stake by June 2011.
The deal comes amidst separate reports that Malaysian billionaire T Ananda Krishnan’s Usaha Tegas Sdn is looking to invest upto $250 million in KSK Energy Ventures Ltd and some of its projects.